From education to exchanging notes to being able to “say yes more” as a supplier, the benefits of clustering are well-known. And for a little over two years, these have been among the goals of the Southern Strength Agile Manufacturing Network.
“The analogy we use in a lot of our discussions is that Australis Engineering couldn’t build a train,” Peter Gustafson, managing director at Australis Engineering and a board member with Southern Strength, explained when asked of what a business could gain by joining the cluster.
His own company, which specialises in areas including palletising, conveyor systems and materials handling solutions, would not be able to put together a strong case if a tender for a train was put out. However, by joining forces with other local manufacturers, capabilities would be increased.
“For example, we could build the wheels and somebody else could supply and manufacture an air conditioning system and somebody else can supply the upholstery for the seats, etc. etc. etc.” he told Manufacturers’ Monthly.
“And if a tender came out for a train we wouldn’t be able to do it. But by being in the network with other manufacturers it gives us the opportunity to be able to participate in that kind of work. So obviously that’s a fictitious analogy, but that’s the concept.”
The southern Sydney region that the Southern Strength network serves counts manufacturing as one of its most important sectors. Sutherland Shire Council area counts the industry as its third-biggest employer, following retail trade (beefed up by hubs at Miranda, Caringbah and Cronulla) and Health Care & Social Assistance.
It’s even more important in the Bankstown Local Government Area, where manufacturing is the main employer. According to the most recent census figures, it provides jobs to 23.1 per cent of the local population. Manufacturing is so important to both LGAs, that both Councils are members of the Network and Sutherland Council is also represented on the Board, said Gustafson.
What Southern Strength hopes to do with the huge concentration of local manufacturers is to support them through things such as increasing opportunities as suppliers, boost their business education, and help them share their own hard-earned wisdom with each other.
“Southern Strength provides a sounding board for people in the SME space”, the group’s chairman, Steve Atherton (who is also CEO of Air Change Australia), told Manufacturers’ Monthly.
“There is an opportunity for some business-to-business, which has happened, and an ability able to source products from companies at competitive rates,” he said.
Regular presentations from corporate clients and business management experts with advice on how to earn more contracts and be innovative in business are also features.
“Recently we had the procurement officer from Caltex attend a meeting to tell us of upcoming opportunities where Caltex believe they have capacity issues,” said Gustafson.
Defence has also emerged as an area where local business has opportunities, with many members having past or current defence industry supply capabilities. Former head of Defence Lieutenant General (Retired) Ken Gillespie has presented to the group on how defence industries seek out and encourage clusters in order to create efficiencies in R&D and product development.
“And one of the things we identified during his presentation was a large number of our members have a defence track record,” noted Gustafson, who states that the defence segment will be a large part of the group’s plans for 2014.
He eagerly added, “We’ve got confirmation that Thales and BAE Systems will also come and address our members to discuss the capacity constraints they have in their supply chain and how our members can benefit.”
Local educational institutions have also been heavily involved, Atherton pointed out.
“We have had presentations from a couple of universities and TAFEs and certainly for 2014 we recognise we need to do more of that,” he said.
“And we do have some great facilities in the local area south of Sydney, we’ve got UTS, we’ve Uni of NSW and Western Sydney, as well as Wollongong University, which have presented to us.”
Gustafson also says that partnering with these local educational institutions is key to any future development of a Defence Hub for the area and so fostering these relationships is a key outcome for the Network as it continues to grow.
A significant portion of the group’s current members work in metal related industries, though the cluster is open to all types of manufacturers.
“We are on a membership drive,” said Atherton, and we are calling upon any manufacturing business located in southern Sydney to join the network and build upon our capability areas.
“Increasing our membership is important because it will provide a critical mass that will encourage more potential corporate clients – the ones such as Caltex, Thales and BAE to come directly to the Network members to discuss their procurement needs.”
Southern Strength is also open to local non-manufacturers offering professional services to manufacturing businesses.
In theory, even out-of-towners could join.
“We’ve not said no to anybody,” said Atherton.
“We’re generally from southern Sydney and most of our functions are in southern Sydney, and we’re aware that there’s another manufacturing cluster in Wollongong and there’s another one in Newcastle and in western Sydney, so we tend to try to use the southern geographical area as our hub.”